Its distribution might still be nascent, but Bucha’s leadership is thinking big after a merger with Xing Tea.
Brent Willis, the CEO of the publicly traded kombucha company, announced the merger today with Xing, a Colorado-based natural tea line that is also owned by Tom Lebon and Scott Lebon, the brothers who run Denver distribution powerhouse New Age Beverage.
Under the deal, Bucha is paying close to $20 million in cash and stock for XingTea, XingEnergy and Aspen Pure water, enabling the Lebons to buy out longtime silent partner Dan Carney. Under the arrangement, Tom Lebon will remain the head of sales for Xing, while Scott Lebon will run operations for the brand; Willis, who once ran Cott Corp. in addition to several other executive slots with companies like AB InBev and the Coca-Cola Co., will be CEO of the combined entity.
“We can take the position as a world leader in healthy, functional beverages,” Willis told BevNET.
The combined companies believe the partnership will quickly realize about $7.5 million in combined cost savings and revenue expansion in the next 12 to 18 months, with Xing’s sales force driving Bucha through its broader distribution profile, according to Willis.
Bucha will quickly realize distribution through having the brands plugged into the Lebons’ own distribution company, which has about 4,500 accounts in the Rocky Mountain region. Then sales efficiencies will help power more growth for the kombucha brand, which has the advantage of being able to travel at ambient temperatures, according to Willis.
As for Xing, “We’ll have a good partner who can help us strategically,” said Tom Lebon. “It gives us the money to start doing marketing and the things we haven’t been able to do out there.”
The combined entity, New Age Beverage Corporation, will eventually trade as NABC on the OTC exchange, with plans to move to a more senior stock exchange. Currently Bucha itself trades under the ticker symbol ABRW, the remaining legacy of craft brewer American Brewing, which sold its brewing business last year to focus on healthy, functional brands. The sale left the company with positive cash flow — a rarity for the OTC market.
The Lebons have been shopping Xing for the past few years, looking for a way to buy out Carney, an aging co-founder of Pizza Hut who financed the brand’s early growth. Xing is sold in 40 states and internationally, with retail information firm IRI showing sales of close to $14 million in the 52-week period ending Jan. 24, 2016 (those sales totals cover Supermarkets, Drugstores, Mass Market Retailers, Convenience Stores, Military Commissaries and Select Dollar and Club Chains).
The company recently launched XingEnergy and will soon receive non-GMO certification for its teas.
“We’re pretty fired up,” Tom Lebon said of the partnership.